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sattari [20]
3 years ago
7

Critical analysis Q16 Suppose that the Federal Reserve purchases a bond for $100,000 from Reggie Rich, who deposits the proceeds

in the Manufacturer’s National Bank. Initially, as a result of this bond purchase, the money supply will by. Suppose the required reserve ratio is 25%. As the result of Rich’s deposit, Manufacturer’s Bank will be able to extendin additional loans. As a result of this purchase by the Fed, the maximum increase in the quantity of checkable deposits that could result throughout the entire banking system is
Business
1 answer:
kkurt [141]3 years ago
3 0

Answer:

Explanation:

• Initially, As a result of the bond purchase, money supply will increase by $100000.

The reason for the increase in money supply by $100000 is because the federal reserve bought bond of $100000 from Riggie Rich. This is an expansionary policy which will lead to more money in supply.

• As a result of Rich's deposits, the bank will able to give $90000 more in additional loans.

The increase in the additional loans will be calculated by removing the reserve required ratio from the deposit.

= $100000 - (10% × $100000)

= $100000 - $10000

= $90000

• As a result of the purchase by the Federal reserve, the maximum increase in quantity of checkable deposits which could result throughtout the entire banking system will be $1000000.

The increase in checkable deposits will be the change in reserve multiplied by 1/RRR. This will be:

= $100000 x 1/10%

= $100000 × 1/0.1

= $100000 x 10

= $1000000

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Answer: d) None of the above

Explanation:

The profit on the sale is not a referral fee as Joanna did not facilitate a transaction between her clients and the people she bought the products for.

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Her selling these products is allowed.

The answer is therefore None of the Above.

3 0
3 years ago
Jake manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash. On payday, he immediately g
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Answer:

The given condition is an example of:

A. Menu costs

Explanation:

In the given question mentioning data is that

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On his very payday he went outside immediately and bought as many goods as he could for himself as he was going to get his pay today and was needing those items.

So, he thought of buying all the items he is needing as for the next two weeks  in order of prevention of the money in his wallet from losing value due to high inflation rates.

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So all this were an example of :

A. Menu costs

7 0
3 years ago
In your own words, discuss GAP management and then suggest a way to reduce the impact of its limitation. Do not duplicate limita
vichka [17]

Answer:

Gap management is a strategy which every business follows. A business can be successful only if it sets goals for its future.

Explanation:

Gap management is the difference between where an organization stands today and where it wants to be in future. A company's management will set its own targets and then sets position of the company. There are limitation of gap management as there can be targets which are sometimes unachievable or there are some external forces which hinders the business progress.

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3 years ago
Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the poll
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Answer:

d. Firm A will spend $4,000.

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Since Firm B cost of Cleanup before it gets the the river is less than the cost of pollution permits, it will choose to clean up its pollution.

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Therefore, Firm A will clean up 10 Tons and dump 40 Tons of Waste.

Cost =(10 Tons *$100)+(40 Tons * $75)

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Firm A will spend $4000.

4 0
3 years ago
Read 2 more answers
Mountain High Ice Cream Company transferred $68,000 of accounts receivable to the Prudential Bank. The transfer was made with re
horrorfan [7]

Answer:

Entries are given below

Explanation:

Calculations

Cash = ($68,000 x 90%) - ($68,000 x 2%)

Cash = $61,200 - $1,360

Cash = $59,840

Loss on sale = ($68,000 + $3,800) - ($59,840 +$5,800)

Loss on sale =  $71,800 - $65,640

Loss on sale = $6,160

Entries

                                                   DEBIT      CREDIT

Cash                                           $59,840

Loss on sale                              $6,160

Receivable from factor            $5,800

Recourse liability                                        $3,800

Receivables                                                  $68,000

4 0
3 years ago
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